Commentary on Radio & Audio

March 03, 2016

Radio: Disrupt Or Be Disrupted

The world as we know it has been disrupted. Look at almost any industry, especially in technology, and you’ll see that new players have come into the space, offered the product or service in a new way, and left the old-school ways of doing things in the dust. Anything that can be digitized can be disrupted. Why, then, do we think radio can’t be disrupted?

Innovator and X Prize creator Peter Diamandis says that everything will be disrupted — and that either that will come from those who are willing to disrupt their own industry, or it will come from outsiders. Typically, insiders won’t disrupt because they are so enamored of the way they do things that they can’t see the benefits of disruption.

Kodak is the perfect example. In 1975, Kodak invented an early digital camera. Yet executives in the company said it was a toy no one would take seriously. They considered themselves in the chemical and paper business, and believed people would always want prints and film. In 2013, Kodak went bankrupt. Though it has emerged, it’s not the company it once was.

Why, if every industry in the world is subject to disruption, do we in radio think we’re immune?

Why do we think our bond and relationship with listeners will last forever?

Why do we think the AM or FM band is always going to be our primary means of delivery?

Why do we think that music licensing and streaming fees are a barrier to entry that will protect radio forever?

Why do we think audiences will always want radio content the same way we have always delivered it?

If you follow the patterns of disruption, there is an early stage where potentially disruptive technology is present but hasn’t seemed to catch on. That period can last for years. Then someone builds something brilliant on top of that tech, and it takes off. The government invented the Internet, but it took 22-year-old Marc Andreessen to create the Mosaic Web browser, a tool that made it usable for all. Even then, it took years for the Internet to achieve massive scale. But then it seemed everything had changed overnight.

Everyone explained why Amazon could not succeed, including its lack of profitability and high costs of infrastructure. Though it took a decade, Amazon ultimately became the standard and disrupted the book business, the video rental business, the retail business (it’s the largest retailer on earth, much larger than Walmart), the data storage business, and probably many other industries.

I have love and passion for this business we call radio, and I believe the root of entertainment, information, community, and talk or music are key elements that it will never lose. But I’m not convinced we won’t be disrupted. People are pleased that Pandora and Spotify are not as strong as they were once perceived to be, but that doesn’t mean very much, and it’s not something to be celebrated. Both have nonetheless disrupted how consumers use audio — and more disruption will occur.

I don’t think the question is whether disruption will occur, only how and where the disruption will come from. Chances are it’s out there and in the works now. And if not, it’s about to be.

So if radio is to be disrupted, shouldn’t we, the people in the industry, be responsible for disrupting ourselves? It seems to me we should be. And why shouldn’t that disruption come from you?

Here is what I think will be disrupted in the near future:

How advertisers buy audio. Is programmatic that disruption? Probably.

How local advertisers buy radio and audio. Will programmatic come at a local level? Probably.

I also think someone smart will figure out how to eliminate the local sales system. Other industries have figured out how. Why not radio? Any process can be automated up to a point. Though sellers are critically important, and may always play a role, that role will change.

How listeners use radio. When all of us are riding in self-driving cars in the near future and we don’t have to keep our eyes on the road, the car will be a transportable office or living room, used for working, watching video, being on the phone. Radio’s role in the car will change.

How listeners engage with audio. Perhaps it will still be Spotify or Pandora, but perhaps those were stepping stones to a new method not yet invented. Maybe it’s the NextMedia radio app on the phone (it can’t hurt), but I suspect it will look a lot different from anything anyone is doing at the moment.

Radio programming will change dramatically because of big data and the ability to know exactly what a listener is doing and matching their activity, their location, or their mood. Sensor devices could let you know when listeners are jogging, resting, working, etc., and you’ll know exactly which songs they love and reject, and what they have listened to in the past during those activities so you can match it exactly. More and more, programming will be delivered one-to-one.

Radio ads will follow the same track, and the listener will be fed ads based on their activity, their physical location, and their online activity. If you were looking for black pants and didn’t buy any, an ad will tell you they are just around the corner and that you need them for your date tomorrow night. Or you’ll be nudged when you’re driving near an oil change shop and your in-car sensors tell you it’s time for a change and your calendar shows you have the time. Ads will be giant robotic networks. And that, of course, will change what you’re selling and how.

In spite of how much I love new technology and how much I love the idea of disruption, I don’t like being the guy delivering the news that our world probably will change. If others disrupt us then we lose control and lose revenue opportunities. If, on the other hand, we disrupt ourselves, we have an insurance policy of sorts on our revenue.

It’s natural to think that all of this is out of our control, that it’s the job of our companies or our bosses to figure it out. But they may be too close to it, and you may be the person who has the idea that will disrupt this industry. All it takes is a great idea — a unique thought, and the persistence to find people to help you execute it. I, for one, hope to hear your ideas.

Radio plays an important role in people’s lives, but so did telegrams, photo processing shops, travel agents, and retail stores. Though it’s hard to have one foot in the old way of doing things and one foot in the next, it’s better you than someone from the outside.

Again, I applaud and side with you, Mr. Rhoads. I love this saying--that I paraphrased based on something I read--that The future is recognized by artists far more frequently than scientists and then the rest of the world catches up. I also believe that the change can come from within-*only with* a little help from the bravest and brightest minds using the best technology. These people at first glance may look as they come from outside the industry...but if the people offering change are originally *from* the industry, are they considered from outside or inside? As with everything, there are subtle shades of gray in the argument that most people can't bother to decipher without help. AND that is why education is key to making these important, strategic decisions. Get informed not just from the people who come to you (marketing) but also from the people in the industry that you must seek out on your own. Making strategic decisions is thee hardest thing for a company head to do so it makes sense to seek out everybody associated with your industry first, before you look outside. Hope this makes sense.